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Shipbuilder Austal has announced the closure of its southern Tasmanian shipyard, citing a change in global demand for its products.

Austal announced on Wednesday the Margate shipyard would be closed by September, once the company had completed the construction of two more ferries at the site.

The yard currently employs 121 workers, most of whom will be made redundant in the coming months.

Austal's head of Australian operations Andrew Bellamy said there was no longer a market for the ships built at the Margate site.

"It's been driven by a change in the market," Mr Bellamy told reporters in Margate on Wednesday.

"The whole industry has been affected by the GFC (global financial crisis), but this is a more permanent shift for the small patrol boats and small ferries, which are increasingly being built in country.

"We no longer have a sustainable position to continue this operation."

He said Austal would look to relocate some of its workers within the company.

The company's results would not be overly affected, thanks to a contract with the US Navy, Mr Bellamy said.

"The impact will be small," he said.

"In the overall scale of the organisation, we have an order book of approximately $800 million.

"In the three years that we've had this shipyard, we've completed five ships, with another two on order. The total value of those boats is $80 million."

He said the company would look to sell the site, which it purchased in 2007, upon its closure.